Export-Import Bank Key to Doubling Exports
Two U.S. manufacturers testified today about the significance of exports to manufacturing growth and the important role of the Ex-Im Bank. The hearing, titled “Stakeholder Perspectives on Reauthorization of the Export-Import Bank of the United States,” was held by the Senate Banking Committee’s Subcommittee on Security and International Trade and Finance. The Ex-Im Bank will need to be reauthorized by Congress before its current authorization expires on Sept. 30, 2011.
Noteworthy testimony from the hearing came fom David Ickert, Vice President of Air Tractor Inc., who described how export growth correlated directly with the company’s employment increases. At the end of 2007, Air Tractor had 165 employees and 36 percent of its sales were export sales. In 2010, the company had 220 employees and export sales accounted for 56 percent of sales volume. Air Tractor has used Ex-Im’s medium term credit insurance to secure more than 80 export sales since 1995, and the company expects to complete 30 such deals in 2011. From Ickert’s testimony:
“The growth of exports has been a significant contributor to the job growth of Air Tractor in recent years. The growth of exports at Air Tractor is a direct result of Ex-Im having programs such as the Medium Term Credit Insurance program that we could access to provide financing for our end user customers outside of the United States.”
Clay Thompson, Director of Global Government Affairs at Caterpillar, cited three priorities for Ex-Im Bank reauthorization: an increase in the Bank’s financing cap, revised local content policies and elimination of cargo preference requirements. In his testimony, Thompson said:
“We anticipate the role of Ex-Im will become even more critical going forward. Competition for global leadership in our industry is playing out right now in markets like Asia, Africa and Latin America. Our global competitors, like us, recognize the strategic importance of these markets… Ex-Im is a critical tool that can be used to gain market access in emerging high-growth markets where commercial banks need credit enhancements to support large project loans and augment commercial bank capacity.”
The testimony from these two manufacturers illustrates the importance of export financing to doubling exports. Additional export financing through the Ex-Im Bank is a key step outlined in our Blueprint to Double Exports in Five Years. Remember that 95 percent of the world’s consumers are outside of the U.S., and manufacturers need additional tools such as the Ex-Im Bank tools to reach these customers in new markets.
Lauren Airey is director of trade facilitation policy, National Association of Manufacturers.